Pressing start on a second controller activates Plankton - using the second controller, target the enemy and 'shake' them using the left stick - left/right a couple of times then up and down to slam them to the ground to daze them. You may be awarded ammo after the shaking!
Doesn't need to be done with two players, as long as you stand on a ledge above the enemies, you can shake to your heart's content and they can't reach you.
I found standing in the area before the kelp plant bed on level 2 useful for this, as the enemies keep respawning - stand in the arched exit to the cave, shake them, then run down and kill them with Spongebob, then run back to the arch and 3 more enemies will appear.
Repeat as needed!